Banks allocate just 35 percent of their information-technology budgets to innovation, while fintechs spend more than 70 percent.
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More than half of the world's banks are already in a weak position before any downturn that may be coming, according to a report from consultancy McKinsey & Co. A majority of banks globally may not be economically viable because their returns on equity aren't keeping pace with costs, McKinsey said in its annual review of the industry released Monday. Banks have pondered whether to compete with, partner with or acquire some of these newcomers.Most recent attempts by banks to boost efficiency have been "business-as-usual," it said.Combined with regulatory factors lowering the barrier to entry -- like open banking and looser requirements for startups -- the environment is increasingly conducive for newer firms to take share from banks.
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